After checking sideways for much of the morning trading session, the natural gas futures market turned lower Tuesday afternoon as traders took profits on warmer weather forecasts and uncertainty surrounding this week’s release of inventory data.

However, bulls would not go away from the session empty-handed as a late buying spree propelled the April contract to a close in the top half of its daily trading range and above its opening print. At $5.688, April was down 3 cents for the session, but within striking distance of its two-month high notched Monday at $5.75.

Even as a late winter storm was dumping a payload of as much as a foot of snow across New England Tuesday, market watchers were focused ahead on the promise of moderating temperatures next week. Cash prices were proof of the market’s ambivalence to the chilly near-term forecasts as Gulf Coast, Mid Atlantic and Northeast spot markets showed little or no daily price change Tuesday.

Looking ahead, expectations for Thursday’s release of fresh storage data are beginning to form a consensus around a withdrawal in the 25-70 Bcf range. Noting that the 146 heating degree days (hdds) for last week fall neatly between the 116 hdds and 173 hdds from the two prior weeks, Tim Evans of IFR Pegasus in New York looks for last week’s withdrawal to fall near the midpoint of the corresponding draws of 96 Bcf and 28 Bcf respectively. “This gives us some further comfort that our 50-70 Bcf estimate won’t prove too far off base, all else being equal.”

On the other end of the storage prediction spectrum with a 25 Bcf call is Thomas Driscoll of Lehman Brothers in New York who calculates that the weather last week was 28% warmer than last year when 82 Bcf was pulled from the ground. “We are raising our end-of-season storage estimate from 1,000 Bcf to 1,050 Bcf to reflect last week’s warmer than normal weather,” he wrote in a note to customers Monday.

Should bears take advantage of the smallish storage withdrawal expectations, the first obstacle will be initial support in the $5.60-62 area. Should the market violate that level, Evans looks for a move down to $5.47-49 area, the $5.37 uptrend support or the $5.035 low from last Thursday’s pullback.

On the upside, Tom Saal and Ed Kennedy of Commercial Brokerage Corp. point to Bollinger Band resistance that may cap a rally near the $5.95 level. “Sellers should be ready between $5.72-95 basis April….End-users wait for a correction,” the Miami-based brokers urged in a note to clients Tuesday.

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